COURT FILE NO.: 17-8682-M DATE: 20181129 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Julie Ellen Madill, Applicant AND: Randall Scott Madill, Respondent

BEFORE: Van Melle, J.

COUNSEL: Mary Anne Cummings, for the Applicant Ross H. Thomson, for the Respondent

HEARD: November 23, 2018

Endorsement

[1] This is the Applicant, Ms. Madill’s motion for temporary spousal support. She seeks $4,981 per month based on the Respondent’s imputed income of $187,000 per annum. She asks that the support be life insured; secured by a charge on the matrimonial home or any other property registered in the Respondent’s name; and costs.

[2] The Respondent, Mr. Madill brings a motion as well – seeking disclosure and accountings of various accounts. As that motion was not argued that portion of the motion is adjourned to no fixed date returnable on 10 days’ notice.

Background

[3] The parties were married on January 21, 1989, having cohabited for 1 ½ years prior to marriage. They separated on September 25, 2015.

[4] There are three children of the marriage, Kyle, age 28, Joshua, age 26 and Alyxandra, age 22. All three children are independent.

[5] The parties have had a Settlement Conference, although a Trial Scheduling Endorsement form has not been completed. In August of 2018 Justice McSweeney made an endorsement that the Settlement Conference had been held; that extensive undertakings had still to be fulfilled; and that a Settlement Conference/Trial Management Conference was to be scheduled by counsel if needed. It appears from this endorsement that if the parties were motivated to move this matter to trial they could do so fairly quickly. Any temporary order that I make need not be in place for a lengthy period of time.

[6] Ms. Madill’s present income is approximately $50,000.

[7] Mr. Madill takes the position that his true income is $46,000.

[8] Mr. Madill and his father Gerald are partners, each owning 50% of Madill Construction. During the marriage, the living expenses of Mr. Madill and family were paid from Madill Construction. Mr. Madill did not have a personal bank account or personal credit card.

[9] Mr. Madill’s income was valued by BDO Dunwoody, a valuation commissioned by Ms. Madill, at $235,000 in 2014 and $194,000 in 2015.

[10] Mr. Madill commissioned his own income valuation. Mr. DeBrincat values Mr. Madill’s income for support purposes as $28,000 in 2014 and $40,000 for 2015.

Argument

[11] Mr. Madill takes the position that this was a “non-traditional” marriage and that as his annual income is less than Ms. Madill’s no spousal support is payable.

[12] Ms. Cummings for Ms. Madill submits that the BDO Dunwoody report is accurate and that Mr. Madill, on examination, confirmed the underlying assumptions in the report. She asks me to discount Mr. Madill’s report from Michael J. DeBrincat CPA, CA, CBV as it does not comply with Rule 20.1(10)7 of the Rules of Civil Procedure. Mr. DeBrincat’s report is attached to Mr. Madill’s affidavit as an exhibit and there is no signed acknowledgement of expert’s duty.

[13] Without commenting at this time on the admissibility of the DeBrincat report I note that Mr. DeBrincat says he relied on the following in valuing Mr. Madill’s income:

a. Mr. Madill’s personal income tax returns and Notices of Assessment for 2014 and 2015; b. The Valuation Report dated September 19, 2017 prepared by Michael J. DeBrincat, CPA, CA, CBV regarding the calculation of Mr. Madill’s 50% interest in Madill Construction as at September 25, 2015; c. The Income for Support purposes report dated August 9, 2018 prepared by Joseph J. Hilton, BScH, CPA, CBV of BDO Canada LLP; d. A summary of personal expenses incurred by the partnership, based on representations provided by the partnership’s management; e. Discussions and correspondence with the partnership’s management.

[14] Mr. DeBrincat states that although he has relied on the above mentioned information and documentation, he did not verify the accuracy or completeness, although he is satisfied as to the reasonableness of the information. Given that the report was specifically prepared for use in these family law proceedings, it would have been far preferable had Mr. DeBrincat reviewed documentation to verify independently the personal expenses incurred by the partnership instead of relying on “representations provided by the partnership’s management”. As there was a claim by Ms. Madill that Mr. Madill used the partnership as his personal bank account Mr. DeBrincat should have investigated to what extent this was true. He should have reviewed the partnership’s Visa statements and bank accounts to determine the accuracy of this allegation. The fact that he did not leads me to conclude that it would be dangerous to take his report at face value.

[15] Mr. Madill has delivered three Financial Statements in these proceedings. Each Financial Statement is different. For the purposes of this motion, I rely upon the Financial Statement that was sworn on November 14, 2018 in response to this motion.

[16] An examination of the business Visa statements for 2014 to date (not all were produced), shows that many personal expenses, including, but not limited to flowers, trips, sporting fees, house expenses, legal expenses, recreation and meals, were paid for through Madill Construction. Even a cursory review of the statements supports the BDO report over the DeBrincat report.

[17] Mr. Madill was questioned and while he did not specifically confirm the numbers in the BDO report, he confirmed the underlying data, namely that money had been spent on all the items enumerated in the BDO report.

[18] For the purposes of this motion, I find Mr. Madill to be less than credible. For example, in his November 12, 2018 affidavit he states at paragraph 5 that Ms. Madill had left him a number of times prior to the final separation. Yet on questioning, at Question 1077 he admits that she had only left him once before for one night. Nothing turns on this, but it demonstrates the untruthfulness of his affidavit.

The Law

[19] The Divorce Act specifically permits a claim for temporary spousal support. Both the Divorce Act and the Family Law Act set out the purposes of spousal support and the determination of the amount. Those purposes are well known, so I need not replicate them here.

[20] Provided there is some entitlement to spousal support, there are different considerations for temporary spousal support than for final spousal support. The different considerations are set out in Chapter 5 of the Revised User Guidelines. The case law reflects these considerations as well.

[21] Justice McDermot in Lamb v. Watt, 2017 ONSC 5838 said at paragraph 20 that the case law is clear that in a motion for temporary spousal support, the claimant does not have to prove entitlement on the balance of probabilities as he or she would have to at trial.

[22] Justice Sherr in Samis v. Samis, 2011 ONCJ 273 quoted with approval Kowalski v. Grant, 2007 MBQB 235. At paragraphs 43 and 44 he said as follows:

1. Interim support is to provide income for dependent spouses from the time the proceedings are instituted until trial.
2. The court need not conduct a complete inquiry into all aspects and details to determine what extent either party suffered economic advantage or disadvantage as a result of the relationship. That is to be left to the trial judge.
3. Interim support is a holding order to maintain the accustomed lifestyle if possible pending final disposition as long as the claimant is able to present a triable case for economic disadvantage.
4. Interim support is to be based on the parties' means and needs, assuming that a triable case exists. The merits of the case in its entirety must await a final hearing.

In Robles v. Kuhn, 2009 BCSC 1163, the court added the following considerations:

1. On interim support motions, needs and ability take on greater significance.
2. On interim motions, the need to achieve self-sufficiency is of less importance.
3. Interim support should be ordered within the range of the Spousal Support Advisory Guidelines, (Ottawa: Minister of Justice and Attorney General of Canada, July 2008), unless exceptional circumstances dictate otherwise.
4. Interim support should only be ordered where a prima facie case for entitlement has been set out.

[23] This makes sense because at trial there will be a full inquiry of all the considerations for spousal support and the application of the facts of each case to those considerations.

[24] Thus whether or not this was a “traditional” or “non-traditional” marriage is not relevant on this motion.

[25] A court is of course entitled to impute income in cases where it makes sense to do so. Courts have held that the considerations enumerated in Sections 18 and 19 of the Child Support Guidelines apply to spousal support as well as child support. The circumstances allowing imputation of income as set out in those sections are not exhaustive and the court has a general discretion to impute income in other situations where it considers it appropriate to do so. (Crowe v. McIntyre, 2014 ONSC 6700, paragraph 29)

[26] In the present case, I have no doubt that the income Mr. Madill reports on his Income Tax Return does not reflect his true income. It is obvious from looking at the disclosure and both income reports that he runs all of his personal expenses through the partnership. It does not appear that these amounts are attributed to him as income for tax purposes.

[27] While it would be tempting to accept the Dunwoody report in its entirety, I am mindful that the amounts in the report were not put to Mr. Madill on questioning. Also, unfortunately Mr. Madill appears to have made late disclosure of Madill Construction’s Visa statements, thus a reconciliation could not be provided. I do not however, accept that the amounts reported to Mr. DeBrincat were accurate. Factoring in a discount to take into account that the “right” numbers might not be before me I believe that Mr. Madill’s income for support purposes is in excess of $125,000. It is therefore reasonable to use that number for temporary support. I have arrived at this number by examining both parties’ income reports; reviewing the Visa statements; the affidavits and the transcript of Mr. Madill’s questioning. While this number is my best “guesstimate” it is without prejudice to either party’s ability to argue at trial for a different number based on the evidence available at trial. I am mindful that temporary spousal support is ordered to get the parties to trial and that adjustments can be made on a better and more complete evidentiary record.

Quantum

[28] The Revised User Guidelines stipulate that absent exceptional circumstances the Spousal Support Advisory Guidelines apply to temporary orders as well as final orders.

[29] In order to ascertain where within the SSAGs temporary support should fall, it is helpful to look at the parties’ expenses. Mr. Madill has monthly expenses of $3,554.20, which expenses do not include rent or mortgage as he lives in the matrimonial home mortgage free.

[30] Ms. Madill’s monthly expenses are $5,565.42. Her monthly expenses are higher than Mr. Madill’s as she has to pay rent and is unable to pay her monthly expenses through a business. The SSAGs suggest low range support of $2,344; mid-range of $2,734 and high range of $3,111. In this case the high range is appropriate as it is likely that I have underestimated Mr. Madill’s true income, which is a consideration to be taken into account when determining where within the SSAGs support should fall. After taking income tax into consideration Ms. Madill will receive $1,894 of that amount which will assist her in meeting her shortfall pending trial.

[31] I make no order for security for support at this time. Mr. Madill remains in the unencumbered matrimonial home, which home at the very least could be looked to for ongoing support if necessary. My order is not dispositive of this issue. If circumstances change this part of the motion can be brought back on.

[32] After the motion was argued, I asked counsel to put relevant Offers to Settle and Costs Outlines in a sealed envelope to be opened by me after making my decision. Mr. Madill offered a limited time payment of $1,000 per month, not subject to variation. Ms. Madill sought a temporary order of $3,750 based on an imputed income to Mr. Madill of $150,000. Neither party was more successful than his or her Offer. However, Ms. Madill has achieved success in having income imputed to Mr. Madill and in obtaining a temporary order for spousal support. She claims costs all inclusive on a partial recovery basis of $7,402.23. Mr. Madill’s Costs Outline is $8,921.35 thus he cannot be surprised by Ms. Madill’s costs claim. Therefore, costs of $7,402.23 all-inclusive are awarded to Ms. Madill to be paid by Mr. Madill.

Order

[33] An order will issue that Mr. Madill pay Ms. Madill temporary spousal support of $3,111 per month commencing September 1, 2018 and that Mr. Madill pay costs to Ms. Madill fixed at $7,402.23 all-inclusive. Costs are payable within 30 days.

Van Melle, J. Date: November 29, 2018

COURT FILE NO.: 17-8682M DATE: 2017 11 29 SUPERIOR COURT OF JUSTICE - ONTARIO RE: MADILL and MADILL BEFORE: VAN MELLE J. COUNSEL: M.A. Cummings for the Applicant R.H. Thomson, Counsel, for the Respondent ENDORSEMENT VAN MELLE J. DATE: November 29, 2018